Gold Price Plunges Below $4,300 Amid Rate Hike Bets

The price of gold fell below $4,300 in the early Asian session on Tuesday due to higher US yields and hawkish monetary policy expectations.

The recent surge in Treasury yields has strengthened bets that the Federal Reserve will raise interest rates this week. The probability for a September rate hike jumped to nearly 92.4%, according to the CME FedWatch tool.

This development is weighing on gold, as higher interest rates typically make non-yielding assets like gold less attractive. However, strategists at OCBC note that gold's latest rebound has coincided with a pullback in key macro drivers, including 10-year UST yields and oil prices.